UAE Bypass the Straits of Hormuz with New Oil Pipeline

According to the US Energy Information Administration an average of 17 million barrels a day passed through the Straits of Hormuz during 2011, about 35% of all oil traded by sea.

The UAE relies on the Straits of Hormuz to ship all of its oil, yet since the EU announced a ban on Iranian oil imports to come into effect at the beginning of July, Iranian threats to blockade the straits have increased. To avoid this situation the UEA started to develop a pipeline to pump oil from their fields in the west of the country to the eastern port of Fujairah, which will bypass Hormuz entirely.

The UAE have now announced that the pipeline is complete and on Thursday morning oil started to flow to the Gulf of Oman, at an initial rate of one million barrels per day.

The pipeline has an official capacity of 1.5 million bpd, although sources say that it will carry over 2 million bpd; a sizeable portion of total UAE exports of 2.4 million bpd.

A source directly involved with the project confirmed that, “from 0930 today (Thursday) oil has been received at the main oil terminal in Fujairah and 1m barrels is coming in. We will slowly increase it to 1.5m bpd. The plan is to load the first oil tanker around July 1.”